Prime Minister Vladimir Putin chaired a meeting on the development strategy for the pharmaceutical industry in Zelenograd

Vladimir Putin's opening address:

Ladies and gentlemen,

We have gathered here to discuss a pivotal issue-the implementation of the development strategy for the Russian pharmaceutical industry through 2020.

Before we start this discussion, I would like to say a few words about our venue. I visited Zelenograd in 2006 to discuss microelectronic project implementation, and visited Micron Co. What I have seen today moves me to pay the company the compliments it deserves.

Micron has done a great job. What has been set up within a mere three years is, in fact, new production. Its technological transfer has topological standards of 180 nanometres, which is unique in Russia. The equipment has been imported from 40 companies basing in ten countries of North America, Europe, Southeast Asia and entire Asia-in particular, Japan.

Micron has made a contract with the Rosnanotech government company to pose an ambitious goal-switch to 90 nanometre standards in the matter of a year. This is what every Russian industry and the entire national economy needs.

I wish you every success.

The other manufacturing company we have visited today is pharmaceutical. It has been built on a thoroughly new basis within two years and a half- breathtaking success. The plant has also started partnership with Rosnanotech to launch the design and production of seven import-replacing genetic engineering medicines, three trailblazing biotechnological preparations, and new delivery nanoforms for the treatment of cancer and blood, contagious and respiratory diseases.

All this rests on a pioneer technological and scientific basis. The company also deserves attention with personnel recruiting. Many experts have returned to Russia after many years' successful work in other European countries and in America. They have received every condition for further success upon return.

Of no smaller importance is the company's permanent contact with research institutes and universities. This partnership provides what it is the vogue to call "synergism" today. It exemplifies the symbiosis of production, research and education to which we call so often.

I think I have made a sufficient amount of compliments and should pass to our principal topic-the development of the pharmaceutical industry.

The pharmaceutical industry has a direct impact on life expectancy and morbidity and death rates. Evidently, we will never provide the population with quality medicines easy of access unless the industry makes an innovation breakthrough.

Meanwhile, the situation is far from satisfactory. Russia presently possesses approximately 350 pharmaceutical companies, which account for 20% of the market, in monetary terms. Imports make the rest. Foreign medicines are often sold in Russia for prices higher than in any other country. This is hard to justify by transport expenses as they make 0.2% of the value, at most.

Guaranteed medicine sales are among the principal financial bases of strategy implementation. In particular, such sales should rest on government and other centralised purchases, whose amount is quite sufficient in our country, approaching 230 billion roubles a year. However, Russian manufacturers have no permanent or at least long-term access to the market-suffice to say that federal programmes envisage less than 10% of the total contract amount for Russian-made medicines.

In short, Russian manufacturers are nothing but guests in the domestic market.

So the tasks that the state and the pharmaceutical companies face are clear. First, the state purchase policy needs overhauling to introduce clear-cut, transparent market rules to eliminate the possibility of loopholes and abuse that allow sideskirting auction terms. When auctions are held often, prices fall many-fold.

Grotesque instances occur that would make one laugh if they were not so alarming. The price of an auction lot in the Chelyabinsk Region fell to 1% of the initial-believe it or not-after the Anti-monopoly Service interfered.

Russian-manufactured medicines purchased on budget money must make no less than a half of the total supply, in value terms, within the next two or three years. We should shift to long-term contracts with Russian manufacturers for medicine supply to government, municipal and corporate hospitals and clinics, and medical centres affiliate to the Academy of Medical Sciences.

Such contracts will help Russian manufacturers to upgrade production facilities, and attract finance for technological re-equipment and the introduction of cutting-edge technologies.

That was what the personnel asked when we were making a tour of this pharmaceutical plant-the host of this meeting.

Next, we should provide for the greatest possible number of medicines to be manufactured in Russia-in particular, through licensed production and generics.

We should make a list of important and essential medicines and promote their domestic manufacture through development institutions.

There is a third challenge-counterfeit medicines and ones with expiring shelf life. They all threaten people's health and even life, and the combat against them should not subside.

Fourth, it takes Russian manufacturers too long to switch to GMP and other international standards, without which the Russian pharmaceutical industry will never become an equal competitor in the world.

I have just discussed the matter with the Health Minister. It is clear that if we shift to the new standards overnight, Russian manufacturers will vanish from the market-but it is also impossible to stay in our present state forever. What we need is a stringent plan for gradual transfer to GMP. Medicines that do not qualify will never more be purchased out of budget allocations after such a plan is implemented.

Fifth, disintegration is one of the reasons why the Russian pharmaceutical industry lags behind. To consolidate it is a must. It needs integrated structures linking research and development with manufacture by market instruments.

In this connection, the state should allow interested companies participate in subsidising interest on re-equipment loans. I have made a relevant instruction to the Industry and Finance ministries, and I hope they will urgently take stock of it and advance their own ideas. The arrangement requires about 700 million roubles, as Mr Viktor Khristenko and I have calculated.

Sixth, government development institutions should take practical part in the R&D of innovation medicines, their launching into production and promoting the Russian pharmaceutical industry in the foreign markets, with priority for the developing countries.

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Ladies and gentlemen,

I cannot pass another burning issue in silence, however unpleasant it might be. I mean the abnormal relations that have emerged within the previous decades between medicine manufacturers-mainly foreign-and a part of the Russian medical community. It is natural for pharmaceutical companies to advertise their production but they should be civilised and comply with universally acknowledged ethical norms and the Russian legislation.

Meanwhile, pharmaceutical concerns pay doctors bonuses for prescribing their medicines-sometimes even on forms printed by these same suppliers. This is an inadmissible practice. Manufacturers sponsor seminars and other corporate events, often with venues on subtropical seashores. Such events involve thousands of Russian doctors-thousands, I stress.

Pharmaceutical mammoths have established strong and ramified lobbies. We should put an end to these abuses. Medical ethics should be made more stringent, and profit made on this ignoble practice should be prohibited legally. I hope the medical community will pay attention to it because its own action will be the most effective.

We should also get rid of so-called pharmaceutical representatives in medical institutions. True, there are such people in other countries but their work is harshly limited while taking unhealthy forms in Russia. For the start, we should at least appoint limits to their activities and make them more transparent.

Last but not least, persons remunerated by manufacturers should not work in expert boards on new medicines. Clashing interests are evident here to the detriment of the industry because, as a rule, experts working in such boards shrug off quality as they promote the medicines of the company that pays them.

I see how sensitive these matters are. Medicine manufacturers in Russia and other countries are very sophisticated when it comes to their interests. They need quite a short time to find support in relevant offices, canvas public promoters, and set up committees of all kinds. If we want to protect our nation, we should proceed from national not corporate interests.

As for the civilised dialogue between the medical community and pharmaceutical companies, we might establish a market council on a par with what the energy and some other industries have.

The development strategy for the pharmaceutical industry sets ambitious goals. When implemented, it will increase the share of Russian-manufactured medicines from 19% to 50% in value terms. Innovation medicines will make 60% or more of the entire output, and 85% of important and essential medicines will be manufactured in Russia.

I would like to hear how strategy-related work is going on, and to what an extent the pharmaceutical industry is ready to hit the targets posed it.